Private companies have reacted sharply to a clampdown on corporate misgovernance in the wake of the Enron debacle, although the bulk of new enforcement regulations will apply solely to publicly-listed firms.

Fifty-seven per cent of independently-owned Irish businesses expect to be come within the remit of new corporate governance directives and plan to, or have already, introduced new checks and balances.

Altogether, seven in 10 companies polled in a survey by Grant Thornton have tightened up internal monitoring as a result - second in Europe only to Germany.

Some 28 per cent of 200 firms surveyed have already appointed non-executive or independent directors, 29 per cent have formulated guidelines on director pay, and 22 per cent have formed audit committees.

The appointment of non-executive directors by so many independent traders marks a profound shift in Irish business culture, said Mr Gearoid Costelloe, partner with Grant Thornton.

"Historically, not so many firms of this size have appointed non-executive directors, yet close to 30 per cent now appear to have done so," he said.

Mr Costelloe said more and more small players were doing business with large corporations, requiring them to introduce stricter governance rules so as to be seen to be above suspicion of shoddy practices.

He added: "However, it is also possible that these businesses are recognising the positive role that a non-executive director and more professional governance procedures can play in making them stronger and in increasing shareholder value."